In addition to public works vehicles, Sam Lamerato, superintendent of fleet maintenance in Troy, Mich., maintains police fleets from his own city as well as from other Detroit suburbs. Photo: City of Troy

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Where do in-sourcing customers come from?Of the nearly 900 people who responded to an exclusive survey, most answered that maintaining other city departments' fleets was on the top of the list These fleets might include fire, police, or other maintenance vehicles. Source; PUBLIC WORKS

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Why don't you do in-sourcing?Many fleet maintenance departments are stretched too thin to be able to do any kind of in-sourcing. Most respondents (70%) who do in-sourcing charge time and materials costs for their work. Source: PUBLIC WORKS

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Charlie Caudill (right), fleet manager, and Oliel Gonzalez, fleet maintenance supervisor in Yuma, Ariz., in-source some fleet maintenance work to help balance the budget. Photo: City of Yuma

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David Higgins, director of fleet maintenance Boston's Central Fleet Maintenance division, does all equipment tracking electronically. Photo: City of Boston

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In these days of rising costs for everything from fuel to new vehicles, fleet managers are looking high and low for new ways to meet their budgets.

"You're asked to do more with less or the same budget," said Sam Lamerato, superintendent of Fleet Maintenance in Troy, Mich., a city of 83,000 people. "That's our biggest challenge. Rising fuel and oil costs are tearing up cities' budgets right now."

By talking with fleet managers in three cities across the country, PUBLIC WORKS magazine found a variety of best practices that are helping these managers meet their budget challenges head-on. In addition to Lamerato, we interviewed Charlie Caudill, fleet manager in Yuma, Ariz, (population 89,300), and David Higgins, director of fleet maintenance in Boston (population 600,000). Following are some of their best practices:

In-sourcing. The maintenance shops in Troy and Yuma take in vehicle repair and maintenance work from surrounding communities, which pay time and materials for services performed. The additional revenue helps Troy and Yuma defray overhead costs, and the other communities get the services for reasonable rates.

Active technician training. Five years ago, the city of Troy had no technicians certified by Automotive Service Excellence (ASE). Then the city offered an incentive of $100 more per month to technicians who gained ASE master certification. Today, 14 of the 15 technicians in Troy's Fleet Maintenance division have ASE master certifications, and three have dual certifications.

Aggressive vehicle replacement programs. "Our average vehicle is six and a half years old," said Yuma's Caudill. "That keeps our costs down because a younger fleet is less expensive to maintain."

In an exclusive survey of its readers, PUBLIC WORKS magazine found that most departments (74%) do not use in-sourcing—doing fleet repair or maintenance work for outside agencies or departments—as a form of revenue. Of those who do in-sourcing, 63% of respondents to this July survey indicated that they bring in less than $50,000 from this work.

The fleet maintenance department at Troy took in more than $170,000 of in-sourcing revenue for the year ending June 30, about $10,000 more than the prior year. The shop is fitting up sedans to make them police cars for neighboring Clawson, Mich. "We install the lights, radios and emergency equipment, push bumpers, shotgun racks, and more," said Lamerato. "And we also do that on a time-and-material basis for the Troy Police Department, so that's a revenue stream coming from the same city."

What's more, Troy maintains all fire apparatus for Clawson. And last winter, Troy stepped in when the automatic transmission on one of Clawson's snow plow trucks broke down. "The soonest a local repair shop could fix it was a week or 10 days," said Lamerato. "We fixed it and had it back in their hands in 48 hours."

The Troy shop also has worked for Huntington Woods, Mich., another Detroit suburb, and for Troy's private Medi-Go Plus, which runs four vans that deliver senior citizens to doctor's visits. Troy's shop runs a second shift that starts at 3:30 p.m., so the vans can be repaired overnight and are ready for use the following day, Lamerato said. "Our guys understand how important those doctor's visits are to the citizens," he said. "And since we took them over, we have substantially improved the condition of those vans.

Lamerato plans to do more in-sourcing. "Our reputation is becoming well known," he said. "We're in negotiations to do additional in-sourcing for neighboring communities."

In Yuma, Caudill does the same thing. "We're doing nearly $100,000 a year in work for outside agencies," he said. "That money helps keep the cost down for our existing customers." The city's Fleet Services division of the Public Works Department employs 10 full-time mechanics who maintain 708 vehicles and pieces of equipment, including 12 trash packers.

Fleet Services' operating budget is slightly more than $2 million, not including equipment replacement, so revenues from in-sourcing represent less than 5%. Still, said Caudill, "It pays the light bills, and helps us balance the budget."

The Yuma shop works for Somerton and San Luis, two neighboring communities, and for the local Humane Society, which operates 17 pickup trucks. Additional work comes in from the Yuma Metropolitan Planning Organization; the Yuma Crossing Park; the Yuma Territorial Prison, which is now a museum; and the local Cocopah Indian Nation.

Moreover, said Caudill, "We have a whole bevy of fuel contracts, and we have a markup on fuel." Among others, Fleet Services provides fuel for the Housing Authority of the city of Yuma and for a nine-bus fleet run by Yuma County Area Transit.

These two cities are the exception, however. According to survey respondents, 85% reported that their fleet maintenance department had no plans to add in-sourcing as a means to gain more revenue.